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Senate panel mulls, then kills alternative power plant funding

A proposal to revamp the state’s energy policy passed out of the Senate agricultural committee Monday and is one stop away from the Senate Floor.  James Call reports, the proposal is moving forward without a late filed amendment that would have implemented a major change in the way customers pay for new power plants.

 

An energy bill failed each of the past three sessions because opponents and supporters say they were too heavy. They tried to do too much. This year’s bill, which includes tax incentives for renewable energy sources, is based on recommendations by Agricultural Commissioner Adam Putnam.  Policy makers are very sensitive to cost factors to consumers, as illustrated by how staff director Mack Carter began his briefing on the bill for the Senate Energy Committee:

“The overarching premise of this bill is no rate increase for rate payers. No rate increase for rate payers. Hope you guys hear me on that…”

They did. Two weeks ago, the bill passed the committee unanimously. Some committee members specifically mentioned no rate increase was a selling point for them.  Winter Park’s Andy Gardner is sponsoring the measure. He concedes it is a modest proposal, but adds it can have a significant impact.

Outside a Senate Ag committee meeting Gardner explains the bill tries to give a boost to the renewable energy industry and bio fuels in particular.  More than 50-percent of Florida’s electricity is produced by natural gas, a circumstance that is like putting too many of your eggs in one basket. Florida has been trying to diversify its energy supply for at least five years.

“Ethanol has always been the focus, or other alternative sources, so we put in here some different options other than the corn piece. So I think from the ag stand point, that would be pretty good.”

Bio fuels and Florida’s ability to produce them was not the main point of discussion of the ag committee’s review of Gardner’s energy bill. An amendment, offered by Tallahassee Senator Bill Montford, was. It   would have allowed utilities to increase base rates when new or upgraded power plants started operating.  Currently, those costs are passed on after a hearing before the Florida Public Service Commission. Florida Power and Light lobbyist Mike Sole says such hearings are redundant because the plans for a new plant are reviewed by the government each step of construction.

“This is purely streamlining. We’ve done one thing to change. We built a power plant that everyone approved. And in this case we’re saying if it comes in under budget let’s talk about this power plant. Let’s have the proceeding with the PSC on this power plant that saves significant taxpayer money and saves significant customer money.”

Consumer groups see it differently. Jon Moyle is with the Florida Industrial Power Users Group. He says focusing on just the power plant and not the company operating on it would be a significant change in state policy and would limit the PSC’s ability to consider all costs and benefit factors.

“We see the amendment as a one-way street to a rate increase. Because it limits what the PSC can do to looking at the cost of the power plant and does not take a holistic view of what’s happening with the company. And we think that is not the right way to approach things and is inconsistent with the regulatory compact.”

Montford filed the amendment Friday and then spent the weekend fielding phone calls and listening to people. He pulled the amendment but will not declare it dead. He says he wants to give people time to think and talk about it.

“This is a very complicated issue. It is one that could have a financial impact on businesses and most importantly families. And again, I just thought it was too quick noticed and to move forward. And something of this significant that could have a far reaching impact for years to come I just thought it best to slow down and give everyone time to talk about it.”

The Energy bill now heads to the Senate budget committee without an amendment that could have led to higher electrical rates for consumers.  Which was a possibility that helped doomed a energy bill each of the past three years.